If growing revenue for your small business is one of your New Year’s resolutions, you’re among good company. That being said, resolutions are nothing more than wishes if you don’t have plans in place to make them happen. Here’s a quick look at what you should be doing now if you’d like to see bigger profits this year.
1. Check Out Last Year’s Performance
The best place to start is with numbers from prior years. Gather up details like yearly revenue, monthly cash flow, expenses, and number of sales. You’ll need to know where you were in order to define realistic goals for the future.
2. Choose Your Targets
Examine some of your biggest challenges from prior years or areas where you personally feel you could do better. For example, you might place goals around:
- Increasing revenue over last year
- Increasing the number of sales
- Improving efficiency or capacity usage
- Increasing client numbers and leads
- Decreasing expenses
- Decreasing waits on payments from clients
If you have a team, hold a brief meeting or send out surveys to discuss what concerns and ideas they have as well. When you’ve got a list of targets, narrow it down to your top 3-5 choices, so it’s easier to stay on top of them.
3. Recheck Market Conditions
Do a bit of research to see if there will be unique obstacles this coming year. For example, if you’re in the transportation industry, fuel cost predictions should be taken into account if you’re focused on financial goals. The US Energy Information Administration predicts diesel will drop from $3.17 to $2.95 per gallon, meaning there’s the potential to increase profit this year, so you may actually want to set your profit-related goals higher for 2019 because of this. Your industry and business will have a myriad of factors that will impact your goals, ranging from your costs to doing business through what your competitors are doing, so dig into market conditions a bit before establishing targets.
4. Make Sure You Have Assets and Processes in Place
Once you’ve settled on your targets, make a list of each thing you need to have in place in order to reach the goal. Consider people, money, and equipment. Then, look into your existing strategies and processes to determine whether your current actions will get you to your goals. If not, brainstorm new ideas. If getting approval for financing is part of your plans, take steps now to improve the likelihood you’ll be approved. If you already know you won’t qualify or you’ll be able to meet goals better if you’re receiving prompter payments, apply for invoicing factoring now, so it’s in place when you need it.
5. Create an Execution Plan
Your execution plan should work backward, starting with the final goal, and then establishing each process you’ll need to complete it, when it needs to be completed, by whom, and what they’ll need to reach their goal. For example, if your plan is to increase revenue by 5%, how do you plan to do it? Will you try to get your existing customers to sign up for more services? Bring on new customers? What process will you use for each? How will you measure if you’ve met your goal?
Map out the full year in advance and mark down milestones you’ll need to meet. Refer back to your data from prior years to make sure you’re being realistic. For example, if seasonal shifts give you a surge of business in specific months, be sure your new projections demonstrate the same trends. It’s also important to be mindful of your processes and their associated timelines when creating an execution plan. For example, if you plan to purchase new sales software that will help you generate and convert more leads, make sure your sales targets aren’t increasing until after you have the software and anyone using it is trained. In other words, you may want to increase sales by 5%, and your new software might really help get you there, but you won’t see the shift for at least a few months, so you aren’t going to hit 5% for the full year. While it sounds simple, being mindful of the strategy and how each step works together will determine whether you successfully leap through each milestone or spend the whole year chasing a distant goal you lost sight of in January.
6. Hold a Team Huddle
Once you’ve established targets and established your plan of execution, roll out the goals to you team. Use this as an opportunity to build excitement for the year ahead and get them on board with your plans. Each person will also need to know what their role is and what assets and processes are in place to help them do their part.
7. Track and Share Progress
Have a plan in place to share progress with your team on a regular basis, be it monthly, quarterly, or as larger milestones are met. This will help keep excitement up throughout the year and help you address issues if goals aren’t being met.
Interstate Capital Can Ensure You Have the Cash Flow Necessary to Reach Your Goals
Reaching new business targets often requires new equipment and people, but it’s hard to scale up if your invoices aren’t being paid in a timely manner. To find out if factoring can help you achieve your 2019 business goals, get a free cash flow consultation.